FOR THE RESPONDENT
James H. Voyles
Jennifer M. Lukemeyer
SYMMES, VOYLES, ZAHN, PAUL & HOGAN
One Virginia Avenue, Suite 700
Indianapolis, Indiana 46204
FOR THE INDIANA SUPREME COURT DISCIPLINARY COMMISSION
Donald R. Lundberg, Executive Secretary
David B. Hughes, Trial Counsel
115 West Washington Street, Suite 1165
Indianapolis, IN 46204
SUPREME COURT OF INDIANA
IN THE MATTER OF )
) CASE NO. 08S00-0201-DI-55
DEAN M. BECKNER )
November 19, 2002
Lawyer Dean M. Beckners deliberate and purposeful dissipation of substantial client assets, for
his own benefit, leads us to conclude today that he should be disbarred
from the practice of law.
The Disciplinary Commission filed a two-count verified complaint for disciplinary action against the
respondent on January 15, 2002, upon which a hearing officer appointed by this
Court conducted an evidentiary hearing. Ind. Admission and Discipline Rule 23, Section 11(b).
The hearing officers report, filed August 9, 2002, is now before us. Where
neither party petitions this Court for review of the hearing officers findings we
adopt the hearing officers factual findings while reserving final judgment as to misconduct
Matter of Campbell, 702 N.E.2d 692 (Ind. 1998). Preliminarily, we note
that the respondents admission to this states bar in 1972 confers with us
Under Count 1, we now find as follows: The respondent was the president,
CEO, director and attorney for a not-for-profit healthcare facility (Brethrens Home) that was
loosely affiliated with a church (Church). Though technically an independent entity, in late
1994 the respondent sought and received the Churchs permission to sell the facility
to a for-profit entity, Brethren Healthcare Corporation (Healthcare). The resolution adopted by the
Church provided that the proceeds from the sale would be used to benefit
The five directors of Brethrens Home, including the respondent, were the same
five individuals who were the directors of Healthcare. Healthcare was established for the
specific purpose of purchasing all the assets of Brethrens Home. The respondent was
the incorporator and attorney for Healthcare. Though the shareholders as a group contributed
only $5,000 to the corporation, the shareholders agreement for Healthcare executed on November
22, 1994, provided that the fair market value of the shares was $875,000.
Also, on November 22, 1994, the directors of Brethrens Home adopted a resolution
calling for the sale of its assets to Healthcare. Healthcare was to pay
the purchase price to Brethrens Home in 180 equal monthly installments. Brethrens Home
in turn was to assign the proceeds of the sale for the use
and benefit of the Church. While an assignment was never executed, monthly payments
were made to the Church for several years.
The directors of Brethrens Home, including the respondent, agreed to the sale of
Brethrens Home assets to Healthcare for book value without advice from independent counsel.
After the sale was authorized, but before it was completed, the respondent received
a memorandum he had solicited from an accounting firm regarding the sale. The
respondent never disclosed to his fellow directors of Brethrens Home the contents of
this memorandum, which cautioned that a sale for less than fair market value
could result in the loss of Brethrens Homes tax exempt status, cause adverse
tax consequences for the directors, and constitute breach of fiduciary duty by the
directors. The memorandum also noted the need for independent counsel to represent Brethrens
Home, which the respondent ignored.
Further, the respondent never informed any of his Brethrens Home co-directors that, because
he was the attorney for both Brethrens Home and Healthcare, he could not
ethically represent both entities in the buy/sell transaction between them. Additionally, the respondent
never informed any of the directors of Brethrens Home of the legal issues
raised by the fact that they, including the respondent, had a direct and
personal interest in the transaction as directors of the purchaser, Healthcare.
To complete the sale, Healthcare executed a promissory note signed by the respondent
in favor of Brethrens Home dated December 1, 1994, in the principal amount
of $2,200,000. As of the time of the sale, Brethrens Homes assets included
$306,334 in cash, accounts receivable of $244,708, real estate valued at $194,104, buildings
and improvements valued a $3,466,344 and furniture, fixtures and equipment valued at $491,330.
Two mortgages against Brethrens Home property totaled about $700,000. The promissory note stated
that it was secured by a real estate mortgage executed by Healthcare on
December 1, 1994. This mortgage was never recorded by respondent.
On December 20, 1994, Brethrens Home executed a bill of sale to Healthcare,
covering all tangible and intangible property. The next day the respondent, as president
of Brethrens Home, executed a corporate warranty deed conveying five tracts, totaling about
104 acres, to Healthcare. A formal asset sale agreement was executed on February
14, 1995, which provided that Healthcare would sign any mortgage necessary to perfect
Brethrens Homes security interest. However, the schedule of property accompanying the asset sale
agreement provided that Brethrens Home would have a mortgage on all property involved
in the sale except the four acres on which the health care center
was located. This property constituted the most valuable asset being transferred to Healthcare.
As with all other dealings between Brethrens Home and Healthcare, the respondent acted
as counsel for both parties.
On April 28, 1995, an accounting firm notified the respondent that the actual
book value of the assets of Brethrens Home was $2,352,973, but that such
value was not the proper value for use in the transaction. The accountant
again advised the respondent that the sale of assets should be based on
fair market value. In a letter to the Church dated July 21, 1995,
the respondent reported the increased book value and promised that Brethrens Home would
continue making monthly payments of $15,000 until that amount was paid in full.
Over one year after the sale, in February of 1996, Healthcare executed an
amendment to the promissory note in favor of Brethrens Home in the amended
sum of $2,322,973. The amended note provided that it was secured by a
real estate mortgage executed by Healthcare. Again, the respondent never recorded this mortgage.
In October of 1996, the respondent, in an effort to gain total control
of Healthcare, arranged for two shareholders, owning 40% of the stock, to sell
their shares to Healthcare for $504,000. This sale to Healthcare, orchestrated by the
respondent, was completed January 15, 1997. The respondent also arranged for Healthcare to
purchase the other 40% not controlled by the respondent for $500,000. This latter
transaction was never completed, with those two shareholders receiving only about $50,000. After
October 1996, the respondent acted as the sole director of Healthcare.
In December of 1996, the respondent organized a new corporation, BHC, LLC
(BHC) with two equity members, the respondent and his wife. On January 7,
1997, the respondent and his wife authorized BHC to obtain a $200,000 loan
secured by a first mortgage to purchase from Healthcare farmland that had been
acquired from Brethrens Home. On the same day, Healthcare adopted a resolution, signed
by the respondent, authorizing the sale of the farmland to BHC. On May
26, 1997, the respondent became aware that he was under investigation by the
prosecuting attorney. On June 3, 1997, after the sale of the farmland to
BHC, Healthcare executed a mortgage in favor of Brethrens Home covering some of
the real estate transferred in 1994 from Brethrens Home to Healthcare, but omitting
the farmland. This mortgage was recorded June 6, 1997. BHCs purchase of
the farmland was possible only because the respondent had never caused the land
to be encumbered by a mortgage in favor of Brethrens Home, as required
in the agreement for sale with Healthcare. At the time of this sale,
the respondent was president and attorney for Brethrens Home, a director and attorney
for Healthcare, and co-owner of BHC.
The respondent also caused a tract of Brethrens Home improved real estate to
be conveyed to a company controlled by his adult children. On June 26,
2000, BHC conveyed a portion of the land it had purchased from Healthcare
to Beckner Farms, LLC, a company in which the respondent was also president.
Healthcare conveyed an additional portion of real estate to Beckner Farms, LLC, on
November 3, 2000. On November 6, 2001, Beckner Farms, LLC, conveyed a portion
of its real estate to Titan, an entity that the respondent acknowledged
is basically the same as Beckner Farms.
From January 1995 through November 14, 1997, Healthcare made monthly payments to Brethrens
Home, which, in turn made monthly payments to the Church. Thereafter, payments of
lesser amounts were made sporadically until September 5, 2000. On September 5, 2000,
the respondent, on behalf of Brethrens Home, issued a check to the Church
for $7,500, which was not honored due to insufficient funds. No payments have
been made to the Church by Brethrens Home since that time.
The respondent attempted to make it appear that independent counsel represented Brethrens Home,
by asserting that a friend and lawyer had served as counsel for Brethrens
Home beginning December 28, 1994. However, the alleged date of hiring post-dates the
actions relevant to the original sale. The bill of sale from Brethrens Home
and its corporate warranty deed are both dated prior to December 28, 1994.
Further, the so-called independent counsel had never seen and knew little or nothing
about the documents involved in the transaction.
The Church filed a lawsuit seeking to recover its losses, to which the
respondent responded by filing a claim against the Church seeking $10,000,000 in punitive
damages. The health care facility has been closed and the Indiana Attorney General
obtained the appointment of a receiver for Brethrens Home.
We find that the respondent violated Ind. Professional Conduct Rule 1.7(a), by representing
a client, Healthcare, when the representation of the client was directly adverse to
another client Brethrens Home, and where neither client was consulted nor consented to
this common representation; Prof.Cond.R. 1.7(b), by representing a client where the representation was
materially limited by the respondents responsibilities to another client and by his own
interests; Prof.Cond.R. 1.8(a), by entering into a business transaction with a client or
knowingly acquiring an interest adverse to the client without giving the client a
reasonable opportunity to seek independent legal advice; Prof.Cond.R. 1.8(b), by using information relating
to the representation of a client to the disadvantage of the client where
the client did not consent after consultation; Prof.Cond.R. 1.4(b) by failing to explain
a matter to the extent necessary to permit a client to make informed
decisions regarding the representation; and Prof.Cond.R. 1.13(d) in dealing with an organizations directors,
officers, employees, members, shareholders or other constituents without explaining the identity of the
client when it was apparent that the organizations interests were adverse to those
of the constituents with whom the lawyer was dealing.
Under Count 2, we find as follows: An individual, residing in Virginia, died
on September 23, 1990, leaving her entire residuary estate to Brethrens Home and
appointing Brethrens Home the executor of her estate. Brethrens Home, acting through the
respondent as president, qualified as co-executor of the estate. The inventory filed with
the court in Virginia showed estate assets of $701,287.93. Brethrens Home received distributions
from the estate totaling about $486,000. The respondent alleged substantial expenses and losses
incurred in the administration of the estate.
In November 1991, the board of directors of Brethrens Home, which included the
respondent, disagreed about how much the respondent should be paid for his work
on the estate. The board, without any record of the respondent abstaining from
the vote, resolved to let the respondent pay himself whatever he wanted for
his services. In December of 1991, the respondent notified the co-executor that the
respondent would charge $28,000 as the attorney for Brethrens Home and as executor.
The respondent was not one of the executors. In April of 1992, the
respondent acknowledged that payment of $28,000 would cover the fee due to him
in regard to the estate.
However, in August of 1992, the respondent wrote to the co-executor charging an
additional $11,000 fee. The board members of Brethrens Home were not advised of
this request for additional fees.
There is no evidence that the respondent was admitted to practice law in
Virginia. The estate was in fact represented by Virginia counsel, and the accountant
for the estate classified the respondents fees as executor or fiduciary fees, not
attorney fees. Although Brethrens Home was co-executor on the estate, it never received
any executor or fiduciary fees for its services.
Eventually, the respondent provided Brethrens Home with a reconciliation regarding his services in
the estate in which he claimed to have received only $11,000. Additionally, the
respondent submitted invoices to Brethrens Home for legal expenses he claimed to have
earned in connection with the estate. He never supplied Brethrens Home with a
statement of the work he did concerning the estate.
Under Count 2, we find that the respondent violated Prof.Cond.R. 1.5(a) by charging
an unreasonable fee and Prof.Cond.R. 8.4(c) by engaging in conduct involving deceit and
The hearing officer recommended the respondents suspension from the practice of law for
a very significant period of time. She is correct that the misconduct is
In cases of similarly serious misconduct, we have imposed a sanction designed to
protect the public from future harm.
Matter of Radford, 698 N.E.2d 310 (Ind.
1998) (disbarment for entry into business transactions with clients without full disclosure and
appropriate safeguards and neglect of client matters), Matter of Jarrett, 657 N.E.2d 106
(Ind. 1995) (disbarment for pattern of dereliction of duty, abandonment of clients interests
and blatant disregard of financial responsibilities), Matter of Good, 632 N.E.2d 719 (Ind.
1994) (disbarment for conflict of interest, failure to preserve clients property, dishonesty, fraud
and deceit), Matter of Meacham, 630 N.E.2d 564 (Ind. 1994) (disbarment for continuing
pattern of intentionally deceptive conduct designed to convert clients money to attorneys own
In this case, the respondent engaged in deliberate, preconceived schemes to deprive clients
and third parties of substantial sums for his own benefit and the benefit
of his family. Such premeditation indicates a very high level of culpability completely
incompatible with the obligations and entrustments attendant to the practice of law.
of Lahey, 660 N.E.2d 1022, 1023-24 (Ind. 1998); Matter of Helman, 640 N.E.2d
1063, 1064 (Ind. 1994). The record in this case is devoid of any
factors whatsoever mitigating the severity of the respondents acts. Accordingly, we find his
conduct warrants permanent disbarment from the practice of law.
It is, therefore, ordered that the respondent, Dean M. Beckner, be disbarred. The
Clerk is directed to strike his name from the Roll of Attorneys.
The Clerk of this Court is further directed to provide notice of this
order in accordance with Admis.Disc.R. 23(3)(d), to provide notice of this order to
the Hon. Kathy R. Smith, and to provide the clerk of the United
States Court of Appeals for the Seventh Circuit, the clerk of each of
the United States District Courts in this state, and the clerks of the
United States Bankruptcy Courts in this state with the last known address of
the respondent as reflected in the records of the Clerk.
Costs of this proceeding are assessed against the respondent.